Sole Traders

Sole trader service

Experience a complete sole trader accounting service tailored just for you with Tax Surgeons.

Dedicated Accountant - Our sole trader accounting packages include a dedicated accountant committed to providing you with the best possible service. They'll take the time to understand your business and offer tailored advice.

Self-Assessment Returns and Sole Trader Accounts - We handle the submission of your Tax Returns and Sole Trader Accounts to HMRC, ensuring compliance with tax rates and payment deadlines. Plus, we assist in preparing financial reports to support your business decisions.

Award-Winning Accounting Software - Gain access to market-leading cloud accounting software Xero, included in your package at no additional cost.

Never Miss a Deadline - With us, you'll never miss a tax deadline. We'll send automated reminders and follow-up calls to ensure timely filing and payment.

Tax Planning & Advice - Our sole trader accounting packages include regular tax efficiency reviews to help you save money on taxes, ensuring you get the most out of your business.

Complete Service with Fixed Pricing - Enjoy a complete service with no surprise bills. Our fixed monthly packages cover all your needs, including support, advice, and assistance with your accounts and taxes—no hidden costs or unexpected charges.

Take the stress out of sole trader accounting and let Tax Surgeons be your trusted partner in success.

What is a sole trader

A Sole Trader is an individual who operates a business as the sole owner and is personally responsible for all aspects of the business. As a sole trader, you have complete control over your business decisions and can retain all profits after tax. However, you also bear full responsibility for the success or failure of the business and are personally liable for any business debts.

You may need to register as a sole trader if:

  • You earned more than £1,000 from self-employment between 6 April and 5 April.

  • You wish to make voluntary Class 2 National Insurance payments to qualify for benefits.

It's important to note that once you start working for yourself, you are automatically classified as a self-employed sole trader, even if you haven't informed HMRC. This means you must comply with tax and legal obligations associated with being self-employed.

Responsibilities of a sole trader

As a sole trader, you are responsible for several key duties:

  1. Paying Income Tax on your business profits.

  2. Paying National Insurance contributions.

  3. Maintaining records of all business expenses and sales.

  4. Registering for VAT if your annual turnover is expected to exceed £90,000.

  5. Managing and paying any business-related debts.

  6. Settling bills for expenses incurred in running your business.

  7. Registering with the Construction Industry Scheme (CIS) if you work as a contractor or subcontractor in the construction industry.

These responsibilities are essential for maintaining compliance with tax and legal regulations and ensuring the smooth operation of your sole trader business.

Need assistance regarding any sole trader issues?

Speak to one of our qualified accountants to see how we can help you.

Advantages and Disadvantages of being a sole traders

In the UK, many self-employed professionals opt to operate as sole traders. A sole trader is essentially a self-employed individual who runs their own business. When considering self-employment, individuals often weigh the pros and cons of operating as a sole trader versus forming a limited company. Here, we outline the advantages and disadvantages of choosing to operate as a sole trader.

Advantages of being a sole trader:

  1. Faster Decision-Making: Sole traders have the autonomy to make decisions quickly without the need for approval from multiple levels of management or stakeholders.

  2. Cheaper Accounting: Sole traders typically have simpler accounting requirements compared to limited companies, resulting in lower accounting fees.

  3. Retaining Profits: Sole traders keep all profits generated by their business after tax, without having to pay Corporation Tax or employees' salaries.

  4. More Privacy: Sole traders have greater privacy as they are not required to register with Companies House, unlike limited companies.

Disadvantages of being a sole trader:

  1. Personal Liability: Sole traders are personally liable for any debts incurred by their business, which can result in financial loss and debt obligations.

  2. Difficulty in Attracting Large Clients: Sole traders may face challenges in securing work from larger clients who may perceive them as small and potentially unreliable compared to larger companies.

  3. Lack of Sick Pay: Sole traders do not receive sick pay, meaning that if they are unable to work due to illness, they may lose income and risk losing clients.

  4. Accounting Responsibilities: Sole traders are responsible for maintaining accounting records, paying taxes, and managing National Insurance contributions, which can be time-consuming and complex.

Our Sole trader services

If sole trader is the business structure decision you find best suits your needs, we offer a complete service to help cater for all your accounting and tax needs. Explore our comprehensive sole trader accounting service tailored to meet your needs:

  1. VAT Registrations & Returns: We handle all aspects of VAT registration and ensure timely and accurate VAT returns.

  2. Payroll Registrations & RTI Returns: Let us manage your payroll registrations and ensure compliance with Real-Time Information (RTI) reporting requirements.

  3. Pensions & Auto-Enrolment: We assist with pensions and auto-enrolment processes, ensuring compliance with legal obligations.

  4. Bookkeeping: Our expert team takes care of your bookkeeping needs, maintaining accurate financial records.

  5. Tax Investigation Service: Gain peace of mind with our tax investigation service, providing support and representation in case of HMRC inquiries.

  6. Business Plans: We help you develop comprehensive business plans to outline your goals and strategies for success.

  7. Management Accounts: Stay informed about your business's performance with our management accounts service, providing valuable insights for decision-making.

With our sole trader accounting service, you can focus on growing your business while we handle the financial aspects with precision and expertise.

Register for Self Assessment

Registering for self assessment is a fairly simple process, but can get tricky if you are unfamiliar with the process. Follow our guide below to help you navigate the process and be ready to file your next tax return.

Step 1: Create a Government Gateway account

You’ll need a Government Gateway account to sign up and use most online tax services. Head to HMRC online services: sign in or set up an account. Sign up with your full name, email and password, and your user ID will be sent to the email address you provided.

Step 2: Add a Tax

Once you’ve logged into your Government Gateway account, you’ll see the options across the top, select “business tax account”. From this page, you will be able to select “get online access to a tax, duty or scheme.”. Now you can select and register for self assessment.

Step 3: Select Self Assessment for Individual/Sole Trader

From the list you can select and register for self assessment for individual or sole trader. It’s important you select this one as there are different rules for setting up other types of businesses. Once registered your Unique Tax Reference (UTR) will be sent out to you.

What happens next?

HMRC will send out 2 letters, one containing your new UTR, and one with an activation code for your newly added tax, you will require this code to activate your account online.

You can then sign into your Personal Tax Account, which is where you’ll find information like what your tax code is, how much tax you owe, when your next Self Assessment is due and what tax you’ve paid in previous years.

Deadlines

Make sure you tell HMRC about your sole trader status by 5th October in your second tax year. For example, if you start your business in November 2023:

  • Your first tax year runs 6th April 2023 to 5th April 2024

  • Your second tax year runs 6th April 2024 to 5th April 2025

The deadline to register using this example is 5th October 2024. The online tax return filing deadline for this example would be 31st January 2024.

Tax Surgeons Services

At Tax Surgeons, we offer a wide range of comprehensive tax and accounting services to meet all your financial needs.

TAX

  • Corporation Tax

  • Self Assessment

  • VAT

  • Capital Gains Tax

  • Inheritance Tax

ACCOUNTS

  • Statutory accounts

  • Management accounts

  • Bookkeeping

  • Business planning

  • Accounting software

OTHER

  • Payroll

  • HMRC investigations

  • Tax advisory and planning

  • Wills and estate planning

  • Islamic inheritance

Contact us today to see how we can assist you in achieving your financial goals.

Get in touch

Please get in touch to tell us a bit more about you and the tax issue you are facing, or if you would like to learn more about the range of services we offer.

Please enter your details below and we will get in touch at a time that suits you. Alternatively, call us on 020 8914 7868 or email us at info@taxsurgeons.co.uk